TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 776
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....t for building construction, etc. The issues contended by the assessee and the revenue are common and therefore these appeals were heard together and disposed of through this common order. For the purpose of adjudication, we will first consider the appeal of the Revenue and the assessee filed for AY 2022-23 (ITA.No. 4478&3430/Mum/2024) as a lead case. 3. The assessee filed the return of income for AY 2022-23 on 30.09.2022 declaring a total income of Rs. 29,95,97,768/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. A search under section 132 of the Income Tax Act, 1961 (the Act) on 23.09.2021 was conducted in which the various premises of the assessee were covered. During the course of search various loose papers were found suggesting that the assessee was in receipt of unaccounted consultancy fees and also same loose sheets showing notings of unaccounted expenses of construction, consultancy, etc. which were not recorded in the regular books of accounts of the assessee. Based on the seized material found the assessee offered Rs. 11,80,18,000/- as the unaccounted income and after deducting unaccounted expenses to the tune of Rs. 3,....
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....m of expenses @ 30% out of unaccounted business receipts offered without appreciating the fact that the assessee has not submitted any documentary evidences that 30% of the expenses were incurred for the earning of such income and no evidence was submitted by the assessee regarding the claim of expenses?" ITA No. 3430/Mum/2024 for AY 2022-23 (Assessee) "1) On Merits: Disallowance of claim of rental expenses of Rs. 15,75,000/- u/s 37(1) of Act (Para 8.4 on Page Nos.74) 1.1) On the facts of the case, in law and under the circumstances, the Learned CIT (Appeal)-Central erred in confirming the addition of Rs. 15,75,000/- u/s 37 (1) of Income Tax Act by observing that assessee has not used the said premises for business purpose." Unaccounted Business receipts - Ground No. 1 & 2 5. During the course of search at the residential premises of Shri Kaustab Latke an image was retrieved from the Whatsapp message. Based on the said Whatsapp message received from Mr. Pradip Uday Dahale who is the broker of various plots of land, the AO made an addition of Rs. 13,09,93,119/- during the AY 2021-22. For the year under consideration, the AO made similar addition base....
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.... provided to various clients for allotment of TTC cluster and AARUL cluster. It is the claim of learned AO that assessee has received Rs. 46.54 crores out of which Rs. 35.95 crores has already been received by the assessee through various brokers. Seized document shows that there is a tabulated sheet mentioning the name of eight brokers in the first column, in the second column rate is mentioned at Rs. 30 lakhs to 15 lakhs, in column number 3 the number of cases related to each of the broker is mentioned. The total of that column shows that there are 282 transactions. The total receivable broker Wise was mentioned in column number four wherein the total amount receivable is mentioned at Rs. 46.54 crores, in column number five total sum received of each of the broker is mentioned in the total of such column is Rs. 359,490,500/- and in the subsequent column is outstanding balance of each of the broker and the total of such outstanding sum is Rs. 95,206,500/-. Another mage was also found wherein the name of four brokers are mentioned showing total of Rs. 16.24 crores as amount received till date and further the name of the brokers is mentioned against them amount received is mentioned....
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....le total number of cases are eighty-one of TTC cluster and seventy of AARul cluster totalling to 151 units. The total amount received mentioned is Rs. 244,197,000/- (mentioned in fifth column of the seized document against name of Mr. Uday Dahale). Thus, the AO found that the total amount received for 251 cases is Rs. 244,197,000/- and therefore for eighty-one units the amount would be Rs. 130,993,119/-. When this addition was made AO also issued summons to the broker for recording his statement on oath, but he did not attend because of death of his mother. Subsequently letter dated 22/12/2022 he was asked, and he agreed with the claim made by the director of the company and GNP group. The assessee explained that the said payments were made through cheque by the customers/clients directly to the MIDC. The learned AO did not accept, as the director of the company could not produce the details. The AO also disbelieved the receipt of Rs. 1 lakh per unit being consultancy fee of the assessee. Based on this the learned AO made an addition of Rs. 130,993,119/- and of Rs. 81 lakhs to the total income of the assessee as unaccounted business receipts. 68. The learned CIT(A) dealt w....
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....ough cheques from various clients who have acquired the plots of land with MIDC through brokers. Thus, assessee has no role to play in the transaction except to the extent of service fee of Rs. 1 lakh per unit. x. The learned AO has accepted the declared income of Rs. 100,000/- for each unit as unaccounted consultancy fee income of the assessee for all the 281 units. 69. The learned AO is aggrieved and is in appeal before us against the deletion of the above sum. The learned CIT DR vehemently supported the order of the learned assessing officer. He submits that there is no reference of the rates submitted in the seized document of Rs. 15 lakhs to Rs. 13 lakhs stated in the seized documents. Therefore, this aspect has not at all been considered. He extensively referred to the seized document as well as the finding of the learned assessing officer. 70. The learned authorized representative specifically referred to the seized document placed at page number 556 of the paper book. It was stated that the brokerage is not added to the total income of the assessee, but the total sale price is added to the total income of the assessee. He submits that as the land ....
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....land cannot be taxed in the hands of the assessee. Merely because the assessee failed to provide the documentary evidence of payment of cheque by the unit acquired to the MIDC, the whole income cannot be taxed in the hands of the assessee when assessee is not shown to be the owner of such land. In the hands of the assessee, a sum of Rs. 2.81 crores have already been taxed on basis of this document. In view of this we do not find any infirmity in the order of the learned CIT(A) in deleting the total addition of Rs. 13.09 crores in the hands of the assessee. Accordingly, ground number 8 and 9 of the appeal is dismissed." 9. The AO made the addition of Rs. 22,84,97,381/- based on the same Whatsapp message basis which a similar addition was made for AY 2021-22 (refer page 3 of AO's order). Therefore, there is merit in the submissions that the issue is covered by the decision of the Co-ordinate Bench in assessee's own case for AY 2021-22. Respectfully following the above decision, we hold that there is no infirmity in the order of the CIT(A). Grounds raised by the revenue in this regard are dismissed. Unexplained Expenditure u/s 69C 10. The AO made various additions und....
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.... for introducing clients to assessee. Details thereof were furnished to AO vide letter dt. 04.12.2023, 27.02.2024 and 09.03.2024 (Refer Para 17 on Page No.775 of reply given dt. 04.12.2023, Para 6 on Page No. 803 of reply given dt. 27.02.2024 and Para 4 on Page No. 464 of reply given dt. 09.03.2024). e) Details of expenditure of Rs. 66,83,600/- as per seized document found on account of cash vouchers were furnished to AO vide letter dt. 04.12.2023 and 09.03.2024 (Refer Para 22 on Page No. 781 of reply given dt. 04.12.2023 and Para 4 on Page No. 464 of reply given dt. 09.03.2024). f) Personal withdrawals / expenses of Directors are application of undisclosed income offered by assessee and its group (Refer detailed submission in Para 2.3 of letter dt. 27.02.2024 & Para 6 of letter dt. 09.03.2024 of APB) and said explanation duly accepted by AO in the assessment of individual Directors (Copy of assessment orders of directors is enclosed on Page No. 1149 to 1154 of APB) 11. The ld AR further submitted that the similar additions made by the AO in AY 2021-22 were deleted by the CIT(A) and the coordinate bench has upheld the order of the CIT(A). It is also submitted b....
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....om 11/3/2021 to 16/3/2021 during search which disclose the opening balance of Rs. 162,451,306/-, total receipts of Rs. 97,228,748/- and the total payments of Rs. 195,66,500/-. This was the document, which was found from the mobile of the director of the assessee wherein WhatsApp message was sent by Mr. Sailesh Patil to the director. The content of this document has already been dealt with by us in the order earlier. The learned assessing officer made an addition of opening balance, unaccounted receipt and made an addition of unexplained expenditure of Rs. 19,566,500/- as per paragraph number 7.6 of the assessment order. 057. An addition of Rs. 50 lakhs was made under section 69C of the act based on WhatsApp message photo retrieved from the mobile of the director of the company wherein a cash statement dated 22/6/2020 was found wherein the opening balance of Rs. 13.41 crores, receipt of Rs. 329,500 and unaccounted expenditure of Rs. 50 lakh/- was mentioned. The learned assessing officer made an addition of the opening balance of Rs. 13.41 crores, the addition of receipt of Rs. 3.29 lakhs and further the addition of Rs. 50 lakhs of the unexplained expenditure. This has been ....
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....es are related to the purchase of land of Rs. 5.345 acres by one Shri Rajesh Shah and the GNP charges mentioned are Rs. 5 lakhs per acre i.e., 26.725 lakhs, which was, rounded off to Rs. 27 lakhs. There are also references in that of amount 'paid'. The title of the sheet shows that it is land purchased for GNP in his name. This according to the AO establishes that Mr. Rajesh is purchasing the land on behalf of GNP. The land is admeasuring 16.5775 acres on behalf of GNP for a total consideration of Rs. 3.31 crores, out of which Rs. 1.65 crores is cash consideration. Therefore, the LD AO treated this amount as an unexplained expenditure under section 69C of the act. This addition is made as per paragraph number 12.3.3 of the order. 061. Thus, the total addition under section 69C of the act is cumulatively of all such transactions totalling to Rs. 54,830,909/- was made. 062. All these additions were challenged before the learned CIT(A) as per ground number 13 before him which has been dealt with in paragraph number 15 of the order. The learned CIT(A) noted that assessee has offered the income at the rate of 70% of gross business receipts as additional income ....
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....xpenditure which has also been stated in the same documents are also required to be adjusted under section 69C of the act. Argument of the learned departmental representative is that all this expenditure is unexplained expenditure and are not received so the logic given by the learned CIT(A) in deleting the addition is incorrect. He further submitted that section 69C bars any deduction in the act. He submitted that the proviso is clear on this account. 064. The learned authorized representative supported the order of the learned CIT appeal. He further referred to the several judicial precedents and the binding judicial precedents of the honourable Bombay High Court in case of Golani Bros (supra). He submits that assessee has already offered the gross income less 30% expenditure, AO has also taxed the income in the seized documents, in the same document there is reference of expenditure, therefore, it is unfair for the revenue to only tax the income and do not give any credit for expenditure already incurred. He submits that assessee has not claimed any expenditure specifically. In view of this, his argument was that it would amount to double disallowance/addition. ....
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.... view of this we do not find any infirmity in the order of the learned CIT(A) in deleting the addition of Rs. 54,830,909/- under section 69C of the act. Accordingly, ground number 7 of the appeal is dismissed. 14. From the perusal of the above findings it is clear that the basis of making additions made for AY 2021-22 are identical to the additions by the AO for the year under consideration. The coordinate bench while confirming the relief given by the assessee has held that when the net income offered by the assessee, addition towards unexplained expenditure once again cannot be made. Further the coordinate bench has held that the disclosure of undisclosed income is the source for the expenditure and therefore it is the net income that needs to be taxed. The Tribunal also did not find any infirmity in the reliance placed by the CIT(A) in the decision of Hon'ble Bombay High Court in the case of Golani Bros (supra). During the course of hearing, the revenue did not bring any new material on record to controvert the findings of the Tribunal. In view of these discussions and respectfully following the above findings of the coordinate bench we see no reason to interfere with the....
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....ome. The fact shows that during search numerous evidence of unaccounted business receipts and expenditure were found which were not recorded in the books of accounts of the assessee. In the statement recorded of the director, he has accepted and owned various unaccounted business receipts. Assessee offered 70% of such income as net income during statement recorded under section 132 (4) of the act. It was also explained by letter dated 11/2/2022 claiming that the net income is to be estimated based on the evidence found. It was also claimed by the assessee that during search itself, various documents were found which itself shows that there is various expenditure incurred by the assessee for earning that income. The learned assessing officer rejected such claim and did not give any reason that why the claim of the assessee of net income offered should be rejected. The learned CIT(A) found that the AO has made the addition of the entire gross receipts without allowing any claim of the expenditure such evidence is available in the recorded statement and seized documents. It is the claim of the assessee that the gross income offered by the assessee for taxation is Rs. 71,577,000/- out ....
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....eceipts were found of Rs. 23.67 crores and unaccounted expenditure was found at Rs. 7.19 crores which is almost 30.03% of the unaccounted receipts and therefore the claim of the assessee is reasonable and can be accepted that the gross receipts 30% of deduction should be allowed for the expenditure incurred by the assessee. Accordingly, we do not find any infirmity in the order of the learned CIT(A) which is based on the financial statements of the assessee for past year as well as based on evidence found during search in the seized material. Accordingly, ground number 10 of the appeal of the AO is dismissed. 077. In the result, appeal filed by the learned AO is dismissed. 17. We notice that the coordinate bench has upheld the order of CIT(A) on the ground that the past financial statements as examined by the CIT(A) and the seized materials supports the claim that the expenditure incurred by the assessee is around 30%. For the year under consideration the revenue did not submit any evidence to support that the said percentage cannot be applied for the year under consideration also. Therefore in the absence of any contrary material being brought on record we see no reaso....
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....asis for allowing the deduction under section 37(1). In the absence of any proper evidence that the expenditure is incurred wholly and exclusively incurred for the purpose of business, we are inclined to uphold the decision of CIT(A) in confirming the disallowance made by the AO towards rent paid. This ground of the assessee is dismissed. 22. In result the appeal of the revenue and the appeal of the assessee are dismissed. ITA No.4479/Mum/2024 - Revenue's appeal & ITA.3432/Mum/2024 - Assessee's appeal 23. The revenue and the assessee raised the following grounds of appeal: "Revenue: i. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the additions of Rs. 51,48,38,250/- (u/s 694 & 69C) by merely stating that these amounts were not owned up by the assessee but by Sh. Shailesh Patil without appreciating the fact that Shri Shailesh Patil could not identify even a single party other than the GNP in the said document and he could not substantiate his claim with any supporting documents?" ii. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting ....
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....nts found during the search in the name of Shri Shailesh Patil which was made as part of Annexure-1, 2 & 4 to statement recorded of Shri Girish Pawar, Director of the Assessee. The assessee with respect to the explanation of the said documents found submitted that the said documents found is belongs to Shailesh Patil, during the course of search based on this documents found Shri Girish Pawar, director of the company was confronted during the search on the identity and the services provided by Shri Shailesh Patil and in reply to various questions, he has replied that Shri Shailesh Patil is a freelancer and is providing Angadia services including to GNP group for movement of sales proceeds collected at one site / offices to another offices/site etc. as per instruction of their Directors/Partners, and source of said receipts and payment is out of unaccounted business receipts offered by the assessee and its group. The AO held that the said evidence belong to the assessee only and all the transactions appearing in the said evidence are pertaining to the assessee. AO held that the assesesee has not explained receipts of Rs. 17,57,00,000/- and expenses of Rs. 34,24,58,250/- therefore, t....
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....ddition is required to be made on this ground as the document found and the transactions contained therein had been duly owned up by Sh. Shailesh Patil. The CIT(A) however confirmed the disallowance of Rs. 33,20,000/- on the ground that while Shri Shailesh Patil stated that the same belonged to the GNP Group, these entries have not been owned up by the GNP Group in the reply given by the Assessee. Therefore the addition was made in the hands of the Assessee. Accordingly both the assessee and the revenue are in appeal. 27. With regard to the ground raised by the revenue, the ld AR submitted that the issue is covered by the decision of the coordinate bench in assessee's own case for AY 2021-22 and that the CIT(A) has correctly given relief to the assessee by relying on the same. With regard to the addition confirmed by the CIT(A) to the tune of Rs. 33,20,000/- the ld AR made the following submission - For item at Sr. 84 Rs. 3,20,000/- There is a contradiction of answers given by Mr. Shailesh Patil and that by the Director of Assessee and so the same should have been confronted to the Assessee before making the addition For item at Sr. 88 Rs. 15,00,000/- Mr. Shailes....
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....n the construction business of the assessee. On the issue of various entries found therein, the director of the company identified some of the entries and stated that only Mr. Sailesh Patil who has sent this message would be able to show to whom it belongs. It was further stated that the Mr. Sailesh Patil is not the employee of the assessee. On the several entries, the director of the assessee also stated that in the assessment, assessee has offered the income with respect to the same. The summons under section 131 was issued to Mr. Sailesh Patil, his statement was recorded. He stated that. i. He is into the business of angadia, and he collects cash from one-place office customers and delivers the cash at other place as instructed by his customers. ii. He confirmed that he has sent the above WhatsApp message to the director of the company. iii. Assessee group is also one of the clients to whom he provides the angadia services. iv. He further confirmed that he collects cash from the various offices of the assessee and delivers the cash according to the instruction. v. In reply to question number 26 he has categorically stated that the con....
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.... the assessee has given a categorical finding in this regard (refer para 5.18 of CIT(A) order). Therefore we see no reason to interfere with the order of the CIT(A). Ground No.1 of the revenue is dismissed accordingly. 30. Now coming to the ground 1 of the assessee, we notice that the CIT(A) has confirmed the addition based on the statement of Mr. Sailesh Patil who has stated that the amounts belonged to GNP group. However from the perusal of the statement made by Mr. Sailesh Patil basis which the CIT(A) we notice that statement is vague such "to the best of my knowledge the transaction belongs to GNP". We also notice that the director of the assessee has stated that these entries do not belong to GNP group. Since the assessee cannot be asked to prove a negative fact, the revenue in our view should have made the addition based on some evidence and not based merely on the statement of Mr. Sailesh Patil. Therefore in our considered view, the ratio laid down by the coordinate bench in AY 2021-22 that the addition based on mere statement without any evidence is not sustainable, is applicable to the impugned additions also. Therefore we hold that the CIT(A) is not correct in confirmi....
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....of projects GNP-Arcadia, Galaxy, Ganadhish GNP and the same is not claimed as expenses separately as the assessee has claimed 80% of expenses against on money received and disclosed 20% of on-money receipts as additional income. This explanation was not accepted on the ground that the assessee has not corelated the expenses claimed as brokerage paid to Shri Ganesh Kotekar, Shri Bhushan Kotekar and others with details of flats in respect of which the brokerages were paid. Further the assessee has not submitted address, PANs of the parties, etc. With regards to expenses of Rs. 20,82,000/- * The AO rejected the assessee's explanation that cash payment voucher are nothing but expenditure incurred for the purpose of business of consultancy and construction of group and also that it had disclosed unaccounted business receipts and no separate claim was made in respect of any expenses * The AO further held that no details in respect of vouchers were furnished such as name, PAN of the parties to whom payments are made. Shri Kaustub Latke from whom the cash vouchers were found had admitted that they are not accounted in its books of account. Therefore, a sum of....
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.... assessee's case in this regard. 33. We heard the parties and perused the material on record. From the perusal of the facts pertaining to the additions made under section 69C we notice that the same is similar to additions made in AY 2021-22. The contention of the assessee is that the undisclosed expenditure added under section 69C is already part of the net income offered during the course of search. We have while deciding the similar issue for 2022-23 (refer our findings in the earlier part of this order) have placed reliance on the findings of the coordinate bench in AY 2021-22. i.e. The coordinate bench while confirming the relief given by the assessee has held that when the net income offered by the assessee, addition towards unexplained expenditure once again cannot be made. Further the coordinate bench has held that the disclosure of undisclosed income is the source for the expenditure and therefore it is the net income that needs to be taxed. During the course hearing the revenue did not bring any material on record for us to decide otherwise. Therefore respectfully following the decision of the coordinate bench we hold that there is no infirmity in the order of CIT(....
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....t craves to leave, to add, to amend and/or to alter any of the ground of appeal if need be." 37. Ground No.1 is towards the additions of Rs. 87,30,000/- pertaining to on money collection. During the search, an image was found from the Samsung Mobile Phone of Mr. Kaustub Latke, Director of the Assessee which contained an excel sheet. It is seen from the said images that these are pictures taken of running ledger maintained in excel sheet. In response, Mr. Kaustub Latke replied that the transactions were both cash and in cheque but he did not have the exact details of those transactions. Further, he replied that he will furnish the same later on. In post-search proceedings, a date-wise explanation of said excel sheet was submitted to DDIT as well as to AO during the assessment proceedings. The AO made addition towards certain entries found in the message for the reason that there is no mention of either the buyer name or unit no in the narration of these entries and that the name mentioned in the narration is completely different from the buyer names as claimed by the assessee. Therefore, The AO did not accept the the claim of the assessee and made the addition. The assessee conte....
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....ue under consideration stand dismissed/rejected. 39. We notice that in the above decision, the ratio basis which the coordinate bench upheld the decision of the CIT(A) is that same income cannot be twice and that the income offered to tax in the hands of one entity cannot be taxed again in another entity unless the revenue is able to substantiate that the income added is different. The facts in assessee's case is also similar wherein the CIT(A) has deleted the addition after examining the records supporting the claim of the assessee that the impugned addition is already offered to tax in the hands of M/s.Roshini Enterprises. Even before us the revenue has not brought anything on record to substantiate the claim that the addition made in assessee's case is different from what is offered to tax in the hands of M/s.Roshini Enterprises. Therefore in our considered view, the ratio laid down by the coordinate bench is applicable to the impugned addition since there is nothing on record to show that the amount added is not the same income already offered to tax. Considering the peculiar facts and respectfully following the ratio laid down by the coordinate bench, we hold that t....